The Sociological Origins of "White-Collar Crime

Are
millions of middle-class Americans really white-collar criminals?
The unauthorized importation of prescription drugs from a foreign
country is a federal crime. So is "sharing" copyrighted material
without permission. Assisting someone in the commission of a
federal crime is also a federal crime. Countless American seniors
purchase prescription drugs from Mexican and Canadian pharmacies.
Millions of Americans, including teens using family computers,
share copyrighted music without paying for it.

According to the Department of Justice,
"White-collar offenses shall constitute those classes of
non-violent illegal activities which principally involve
traditional notions of deceit, deception, concealment,
manipulation, breach of trust, subterfuge or illegal
circumvention." Under that definition, the illegal purchase of
prescriptions and music pirating clearly qualify. The Justice
Department has recently promoted the idea that enforcement of
federal crimes should be uniform. Nevertheless, it is highly
unlikely that federal prosecutors will hand down millions (or any)
indictments of seniors, parents, and children for these crimes.

Despite the rhetoric, the decision to
prosecute is unavoidably discretionary. How do prosecutors
determine whom to prosecute? All too often, the choice reflects
contemporary politics--and today's criminal du jour is the
"white-collar" crook. Yet when most people talk about vigorously
prosecuting white-collar crime, they don't mean locking up those
who purchase medicine from neighboring countries or pirate music
over the Internet, despite the fact that such crimes defraud
pharmaceutical and music corporations (and thus their shareholders)
of billions of dollars.

What
accounts for the difference in treatment? The Justice Department's
formal definition of white-collar crime disregards class or
economic status. But the truth is that in white-collar cases, such
distinctions do influence decisions about whether or not to
prosecute. Government prosecutors are far more likely to indict the
"upper-class" businessman who works for Tyco--or the faceless
Arthur Andersen partnership--than a middle-class grandmother who
buys medications in Canada. This reflects the socialist origin of
the "white-collar crime" concept. The war against white-collar
crime thus unwittingly stems from and embraces a class-based
sociological concept of crime.

"White-Collar crime"

The
terms "white-collar crime" and its offshoot, "organized crime,"
reflect a half-century-old movement to remake the very definition
of crime. Professor Edwin Sutherland, a sociologist who coined the
term "white-collar crime," disagreed with certain basic substantive
and procedural principles of criminal law. In his landmark book,
White Collar crime,1
first published in 1949, Sutherland dismisses the traditional mens
rea (criminal intent) requirement and the presumption of
innocence.2 He
suggests that the "rules of criminal intent and presumption of
innocence ... are not required in all prosecution in criminal
courts and the number of exceptions authorized by statutes is
increasing."3 If
nothing else, his disregard for age-old foundational principles of
criminal law should cast doubt on the balance of Sutherland's
work.

Sutherland goes on to construct a
class-based definition of "white-collar crime." He is concerned
with who the alleged perpetrator was, rather than what that person
might have done. "White collar crime," says Sutherland, is "crime
committed by a person of respectability and high social status in
the course of his occupation."4 With this radical redefinition,
Sutherland attempted to drain the word "crime" of its meaning. He
made distinctions not on the basis of an act or intent, but
according to the status of the accused.5 Professor Sutherland's supporters have
stated:

The term white-collar crime served to
focus attention on the social position of the perpetrators and
added a bite to commentaries about the illegal acts of businessmen,
professionals, and politicians that is notably absent in the
blander designations, such as "occupational crime" and "economic
crime," that sometimes are employed to refer to the same kinds of
lawbreaking....6

Even
his friends acknowledged that Professor Sutherland was "intent upon
... pressing a political viewpoint...,"7 and that he did so in a "tone ...
reminiscent of the preaching of outraged biblical prophets."8

A Presumption of Guilt

Sutherland relies on the claim that both
corporate and individual defendants are routinely deprived of the
presumption of innocence in criminal proceedings.9 His corporate
examples, however, are nearly all civil and regulatory cases rather
than actual criminal prosecutions.10 Sutherland, perhaps due to a lack of
any substantive legal education, conflates all enforcement activity
against businesses (such as civil suits and settlement agreements)
with criminal prosecution--even where no crime was ever committed.
To Sutherland, proof of corporate culpability is unimportant. He
justifies his mislabeling by alleging that the powerful--despite
the lack of criminal procedure protection that he recognizes and
celebrates --receive preferential treatment in the legal system.11

Sutherland's updated 1983 treatise on
white-collar crime explains:

The thesis of this book, stated
positively, is that persons of the upper socioeconomic class engage
in much criminal behavior; that this criminal behavior differs from
the criminal behavior of the lower socioeconomic class principally
in the administrative procedures which are used in dealing with the
offenders; and that variations in administrative procedures are not
significant from the point of view of causation of crime....12

[M]any of the defendants in usual criminal
cases, being in relative poverty, do not get good defense and
consequently secure little benefit from these rules; on the other
hand, the commissions [that enforce certain commercial regulations]
come close to observing these rules of proof and evidence although
they are not required to do so.13

Sutherland intended to provide a basis for
facilitating more convictions of executives and corporations by
reconceptualizing crime through the term "white-collar crime." He
began by equating the "adverse decisions" of regulatory agencies
with criminal convictions.14 As to people involved in business,
Sutherland sought to deemphasize the presumption of innocence and
the mens rea requirement to facilitate establishing their criminal
liability.15 Yet what
Professor Sutherland called a crime was often only a regulatory
violation. Intent is not normally considered in such enforcement
actions; thus many of Sutherland's "crimes" may have been
inadvertent, unintended acts.16 Nevertheless, Sutherland was
determined to classify such acts as crimes.

Sutherland's influence is clearly evident
in the contemporary substance and practice of federal criminal law.
Many federal offenses prosecuted under the label of "white-collar
crime" are regulatory or public welfare offenses, rather than true
crimes.17 The
principal architect of the U.S. Sentencing Commission's guidelines
for sentencing organizations cites Professor Sutherland's "social
science research," among that of others, to explain the need for
the guidelines, namely the "evidence of preferential treatment for
white collar offenders."18

Stigma Without Sin

Often, when convinced that a person or
class of persons is guilty of a crime, people become impatient with
legal niceties. Sutherland and others who assume the guilt of much
of the business world believe that the ordinary protections of the
law need not apply to persons involved in business.19 When such attempts at
pre-judgment are directed at any other group--even at
terrorists--civil libertarians cry "tyranny." Yet, a civil
libertarian outcry in defense of corporate defendants appears most
unlikely. Concluding that those engaged in business do not deserve
the presumption of innocence, Professor Sutherland dispensed with
the essential (and often most difficult to prove) element of crime:
a guilty mind.20
Although it would be unconstitutional to eliminate the presumption
of innocence,21
Sutherland tries to circumvent this by eliminating the mental
element requirement.

Sutherland dismissed the most fundamental
principles of criminal law in pursuing his belief that the law
unfairly stigmatizes the poor, while it does not stigmatize the
rich and powerful enough.22 Claiming that the law should treat the
two classes more equally, he wrote:

Seventy five percent of the persons
committed to state prisons are probably not, aside from their
unesteemed cultural attainments, "criminals in the usual sense of
the word." It may be excellent policy to eliminate the stigma of
crime from violations of law by both the upper and the lower
classes, but we are not here concerned with policy.23

Sutherland did not seek to eliminate the
stigma of crime (although dispensing with the intent requirement
should theoretically achieve this goal). Rather, he sought to
expand it. The concept of "white-collar crime" has ensured that, in
the quest for greater egalitarianism, the stigma of crime has been
applied against much of corporate America. But before society
stigmatizes and punishes a criminal defendant, the rule of law
requires that reliable procedures determine the defendant's
culpability. Although some academics might wish it were so, it is
not a crime to be wealthy or powerful.

By
disregarding culpability, Sutherland sought to apply the stigma
usually associated with criminal convictions to businesspeople and
corporations in non-criminal regulatory proceedings.24 His book charged that
"70 corporations [discussed in his book] committed crimes according
to 779 adverse decisions [although] the criminality of their
behavior was ... blurred and concealed by special procedures."25 In Sutherland's view,
the complexity of business transactions may make it more difficult
to prove criminal activity. But it is equally possible that
complexity was evidence that in a particular case no criminal
conduct occurred. Without requiring proof beyond a reasonable doubt
of a clearly stated criminal intent, there is no basis for
distinguishing guilty from innocent actions. When prosecutors
indict corporations or their executives for federal crimes, relaxed
standards for proving criminal intent result in convictions where
actual innocence has been "blurred and concealed."26

Traditionally, and for good reason, the
stigma of crime attaches only to individuals proven to have been
"morally culpable" by virtue of having acted with a guilty state of
mind.27 In
Sutherland's view, this traditional protection is an antiquated
technicality. Rather, culpability should involve an externalized
standard of whether a defendant's acts violated the "moral
sentiments" of the people.28 Of course, as the Supreme Court has
forcefully stated, the most basic "moral sentiment" is that society
not stigmatize persons as criminals unless they are proven to have
a guilty mind.

The contention that an injury can amount
to a crime only when inflicted by intention is no provincial or
transient notion. It is as universal and persistent in mature
systems of law as belief in freedom of the human will and a
consequent ability and duty of the normal individual to choose
between good and evil. A relation between some mental element and
punishment for a harmful act is almost as instinctive as the
child's familiar exculpatory "But I didn't mean to,"....29

White-Collar's Sociological Echoes
Today

Sutherland and his successors greatly
expanded the scope of crime by shifting the focus to corporations
and individuals in the upper socioeconomic classes.30 A lawyer-sociologist
critic of Sutherland's work, Paul W. Tappan, long ago noted that
Sutherland's definition of crime departed from the legal
definition.31 Tappan
charged that this development was a "seductive movement to
revolutionize the concepts of crime and [the] criminal...."32 According to Tappan,
Professor Sutherland's definition of "white-collar crime" includes
"a boor, a sinner, a moral leper or the devil incarnate but he does
not become a criminal through sociological name-calling."33

The
term "white-collar crime" has expanded even further, to include
such an array of crime that it has become too amorphous for
analysis.34 Some
sociologists, finding even Sutherland's very loose definition "too
restrictive," "have dropped the class of the offender as a relevant
element."35 Thus,
"white-collar" crime has now become a division of organizational
crime.36 One example
is the Justice Department effort to force corporations to waive
their privilege against self-incrimination as a condition of
pleading guilty. This nascent trend is consistent with and
sociologically derived from Sutherland's thesis that "white-collar"
criminals are not entitled to the same constitutional protections
afforded other defendants. Recently and rather remarkably, the
Justice Department has espoused an essentially class-based view of
the law in requesting that the Sentencing Commission disallow
departures from the sentencing guidelines for "white collar
criminal defendants, who typically have sophisticated counsel."37

In
short, Sutherland's influence continues to this day. Indeed,
compared to contemporary theoreticians Sutherland might seem to
have been a veritable cheerleader for corporate America. Although
mentored by a protégé of socialist Thorstein
Veblen,38 Sutherland
"fundamentally was an advocate of free enterprise," albeit a highly
regulated form thereof.39 At the conclusion of his book, he said
that the upper class commit many crimes, but he could not say
whether "the upper class is more criminal or less criminal than the
lower class, for the evidence is not sufficiently precise to
justify comparisons and common standards and definitions are not
available."40

By
contrast and despite a lack of evidence, Sutherland's own
protégé, Donald Cressey, has repeatedly preached to
college students in his standard college text on Criminology that
"the people of the business world are probably more criminalistic
than the people of the slums."41 Cressey's views are influential. He
was instrumental in the creation of the "enterprise" concept, at
the core of the Racketeer Influenced Corrupt Organizations Act
(RICO).42 Supposedly
designed to target "organized crime," prosecutors have used this
statute to indict all kinds of corporations, and private parties
have used it to sue most major corporations as well as the Catholic
Church.43 All have
been labeled "organized criminals."44 And thus, Sutherland's legacy
continues to echo today.

Conclusion

The
origin of the "white-collar crime" concept derives from a
socialist, anti-business viewpoint that defines the term by the
class of those it stigmatizes. In coining the phrase, Sutherland
initiated a political movement within the legal system. This
meddling in the law perverts the justice system into a mere tool
for achieving narrow political ends. As the movement expands today,
those who champion it would be wise to recall its origins. For
those origins reflect contemporary misuses made of criminal
law--the criminalization of productive social and economic conduct,
not because of its wrongful nature but, ultimately, because of
fidelity to a long-discredited class-based view of society.

John S. Baker, Jr., is Dale E. Bennett
Professor of Law at the Louisiana State University Law
Center45

2.See id. at 52-53. Mens
rea is Latin for "guilty mind" and generally is used to identify
the concept of criminal intent. Traditionally, criminal
intent--that is, the requirement for a purposeful wrongful act--was
a part of the very definition of a crime. See Paul Rosenzweig, The
Over-Criminalization of Social and Economic Conduct, Heritage
Foundation Legal Memorandum No. 7 (April 17, 2003).

3.Sutherland, supra note
1, at 52-53.

4.Id. at 7.

5.See id. at 265 n. 7
("The term `white collar' is used here to refer principally to
business managers and executives, in the sense in which it was used
by a president of General Motors who wrote `An Autobiography of a
White Collar Worker.'").

16.The same act committed
by people with different states of mind traditionally (and morally)
has had different legal consequences. Accidentally wandering onto
someone else's property on a hike may be a civil tort, requiring
compensation to be paid to the property owner if any damage was
done, but it is not a criminal trespass. Likewise, an accidental
bump in a crowd might constitute a slight civil battery (another
tort) but not a criminal battery.

17.See Julie R.
O'Sullivan, Federal White Collar Crime 54 (2001).

18.Ilene H. Nagel &
Winthrop M. Swenson, The Federal Sentencing Guidelines for
Corporations: Their Development, Theoretical Underpinnings, and
Some Thoughts About Their Future, 71 Wash. U. L.Q. 205, 216 &
n. 51 (1993). Co-author Winthrop M. Swenson "was responsible for
the staff group that developed the basis for the organizational
guidelines." Win Swenson, The Organizational Guidelines' "Carrot
and Stick" Philosophy, and Their Focus on "Effective" Compliance
(Sept. 7, 1995), in U.S. Sentencing Comm'n, Corporate Crime in
America: Strengthening the "Good Citizen" Corporation: Proceedings
of the Second Symposium on Crime and Punishment in the United
States (1995), at 29.

31.See Paul W. Tappan, Who
Is the Criminal?, 12 Am. Soc. Rev. 96, 98-99 (1947) ("Apparently
the criminal may be law obedient but greedy; the specific quality
of his crimes is far from clear.").

32.Id. at 98. In his
foreword to the 1961 edition of Professor Sutherland's book White
Collar Crime, Professor Donald R. Cressey commented that the book
"clearly was not an attempt to extend the concept, `crime,' despite
the beliefs of some reviewers." Edwin H. Sutherland, White Collar
Crime iv (2d ed. 1961). He characterized the criticism of Tappan
and another critic as "extraneous." Id. Professor Jerome Hall,
however, has written that "Tappan's attack was devastating." Hall,
supra note 30, at 276.

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Many federal offenses prosecuted under the label of "white-collarcrime" are regulatory, rather than true crimes, requiring no proofof criminal intent. Under this conception of "crime," white-collaroffenders may be sent to prison for harmless mistakes or accidents.The result can be the criminalization of productive social andeconomic conduct, not because of its wrongful nature but because offidelity to a long-discredited class-based view of society.

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